Mersen Sa · EURONEXT:MRN
Mersen Sa — Non-Deal Roadshow (November 2022)
27 slides from Mersen Sa's roadshow presentation, November 2022
Slide 1: Global Expert in Electrical Power and Advanced Materials
Global Expert in Electrical Power and Advanced Materials N O V E M B E R , 2 0 2 2
Slide 2: A global player at the heart of technologies
A GLOBAL PLAYER AT THE HEART OF TECHNOLOGIES WHO DRIVES THE INDUSTRY FORWARD AND SHAPES A MORE SUSTAINABLE SOCIETY KEY FIGURES 2021 RECOGNIZED CSR COMMITMENT AND STRATEGY SALES €923m EBITDA R&D CENTERS 16.1% OF SALES 18 E M P L OY E E S COUNTRIES 7,000 35 2 Road Show Mersen – November 2022
Slide 3: Advanced Materials: high value-added customized solutions
ADVANCED MATERIALS: HIGH VALUE-ADDED CUSTOMIZED SOLUTIONS RELYING ON A UNIQUE MATERIALS EXPERTISE GRAPHITE # 1-2 POWER # 1-2 ANTICORROSION # 1-2 SPECIALITIES WORLDWIDE TRANSFER EQUIPMENT WORLDWIDE TECHNOLOGIES WORLDWIDE Brushes and brush holders Pantograph strips Engineering Heat exchangers systems
Slide 4: Electrical Power: a unique portfolio serving two key applications
ELECTRICAL POWER: A UNIQUE PORTFOLIO SERVING TWO KEY APPLICATIONS ELECTRICAL WORLDWIDE # 2 POWER CONVERSION # WORLDWIDE 2 PROTECTION IN INDUSTRIAL FUSES COMPONENTS Coverage of all standards worldwide: UL, IEC, DIN, etc. Fuses for semiconductors Busbars Capacitors Cooling devices Fuses Surge protecti
Slide 5: A global footprint to maximize customer intimacy
A GLOBAL FOOTPRINT TO MAXIMIZE CUSTOMER INTIMACY, LIMIT INTER- CONTINENTAL TRANSFERS AND EXCHANGE RATE EXPOSURE Europe 21 34.5% sites N. America Present in all large industrial countries with dedicated plant 32.5% Asia-Pacific per business unit 14 30% Multi-activities plants in other sites 13 countr
Slide 6: Dynamic Markets in 2022
Dynamic Markets in 2022 6 Road Show Mersen – November 2022
Slide 7: 6 consecutive quarters of strong growth
6 CONSECUTIVE QUARTERS OF STRONG GROWTH Reported sales % organic growth 350 25 297 300 269 19,2 255 20 231 233 239 250 220 14,5 15 200 12,1 10,7 150 9,5 10 10 100 5 50 0 0 0 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 7 Road Show Mersen – November 2022
Slide 8: Record sales in the first 9-month 2022
RECORD SALES IN THE FIRST 9-MONTH 2022: SHARP GROWTH IN ALL GEOGRAPHIES €524m 1 Europe €265m 1 +11% vs. 9-m 2021 2 North America €289m 3 2 +18% vs. 9-m 2021 €239m 3 Asia-Pacific +11% vs. 9-m 2021 South America – 4 4 Africa €29m +16% vs. 9-m 2021 Organic growth (%) 8 Road Show Mersen – November 2022
Slide 9: Dynamic momentum across all markets
DYNAMIC MOMENTUM ACROSS ALL MARKETS, IN PARTICULAR RENEWABLE ENERGIES AND SEMICONDUCTORS + Solar +++ CHEMICALS 10% ENERGIES Wind ++ 22% ++ PROCESS €821m INDUSTRIES 33% ELECTRONICS Semiconductors SiC + 21% Semiconductors Si ++ TRANSPORTATION 13% Rail + Aeronautics ++ + Road Show Mersen – November 202
Slide 10: Growth market potential confirmed
GROWTH MARKET POTENTIAL CONFIRMED Sales growth Outlook 9-months 2022 Q4 2022 - 2023 SOLAR ++++ Limited graphite volume allocation for the ++ POWER solar industry Significant medium-term potential for SI SEMICONDUCTOR +++ ++ MANUFACTURING Mersen. Increase capacity in South Korea SIC SEMICONDUCTOR ++
Slide 11: Solar: a major supplier across the value chain
SOLAR: A MAJOR SUPPLIER ACROSS THE VALUE CHAIN Electricity generation PROCESS STAGE Silicon ingot Cell Electrical panel Storage Power manufacturing manufacturing protection conversion MERSEN EXPERTISE 2021 SALES CUSTOMERS €71m 2025 EST. SALES €100m 11 Road Show Mersen – November 2022
Slide 12: Essential materials expertise in the Si semiconductor manufacturing process
ESSENTIAL MATERIALS EXPERTISE IN THE SI SEMICONDUCTOR MANUFACTURING PROCESS PROCESS STAGE Ingot pulling Wafer epitaxy Deposition Photolithography Etching Ion & wafer cutting implantation MERSEN EXPERTISE 2021 SALES CUSTOMERS €47m 2025 EST. SALES €60m 12 Road Show Mersen – November 2022
Slide 13: Unique position in the SiC manufacturing process
UNIQUE POSITION IN THE SOPHISTICATED AND INTRICATE SIC MANUFACTURING PROCESS Monocrystalline Wafer Ion Power SiC ingot epitaxy implantation semiconductors SiC wafer PVT 2,400°C +/- 1°C PROCESS MERSEN EXPERTISE SiC powder 2021 SALES CUSTOMERS €36m 2025 EST. SALES €80m 13 Road Show Mersen – November 2
Slide 14: Soitec partnership: new substrates for the EV market
SOITEC PARTNERSHIP: DEVELOPING A NEW RANGE OF SUBSTRATES FOR THE EV MARKET 2021 SALES €0m 2025 EST. SALES SiC ingot Monocrystalline SiC wafer P-SiC wafer €30m Monocrystalline SiC Monocrystalline SiC Polycrystalline Ultra prime SiC (p-SiC) PVT process SiC power Soitec SmartSiCTM semiconductor process
Slide 15: Mersen's offering for EV/HEV applications
MERSEN’S OFFERING FOR EV/HEV APPLICATIONS Inverter 2021 SALES Electrical circuit MERSEN EXPERTISE protection Battery Courtesy: Exagon €16m Courtesy: Würth Electronic 2025 EST. SALES €40-70m 15 Road Show Mersen – November 2022
Slide 16: The means to grow
THE MEANS TO GROW A powerful A strengthened industrial tool team 3 sites IATF-qualified or in progress - fuses 50 people (Shanghai, Juarez, Kaposvar) (in the 3 regions) at end-2021 1 site IATF-qualified - bus bars (Angers) 80 people by end-2022 €10-€1,000 per vehicle A dedicated Quality product rang
Slide 17: A diversified accessible market for Mersen
A DIVERSIFIED ACCESSIBLE MARKET FOR MERSEN Car Tier-1 Battery module New entrants manufacturers suppliers manufacturers 17 Road Show Mersen – November 2022
Slide 18: Outlook
Outlook 18 Road Show Mersen – November 2022
Slide 19: October 2022 targets raised for the 2nd time
2022 TARGETS RAISED FOR THE 2ND TIME, BASED ON EXCELLENT PERFORMANCE FOR THE FIRST 9-MONTHS OPERATING MARGIN BEFORE NON- CAPITAL EBITDA SALES RECURRING ITEMS EXPENDITURE MARGIN Organic growth of between Around Around Growth of MARCH 3% and 6% 10% €80m-€85m 20-30 bps Organic growth of between Around
Slide 20: Increased level of financing and improved financing maturity
INCREASED LEVEL OF FINANCING AND IMPROVED FINANCING MATURITY WITH THE NEW SYNDICATED LOAN NEW SYNDICATED LOAN (€M) OCTOBER 31, 2022 €320m vs €200m before 115 Same covenants Maturity: 2027 ESG criteria on GHG emissions, safety and diversity Maturity* c. 5.5 years 60 30 20 5 15 10 10 2022 2023 2024 20
Slide 21: Ambitious medium-term plan announced in March 2022
AMBITIOUS MEDIUM-TERM PLAN ANNOUNCED IN MARCH 2022 SALES €1,200m OPERATING MARGIN BEFORE NON-RECURRING ITEMS ≥ 11% EV SiC semicon CAGR €923m Si semicon +18% Solar EBITDA MARGIN ≥ 17.5% To be revisited EV SiC semicon Si semicon Solar in Q1 2023 CAGR +4% incl. Aeronautics ROCE and Rail ≥ 12% 2021 2025
Slide 22: Committed to sustainability: 2022-2025 road-map
COMMITED TO SUSTAINABILITY: 2022-2025 ROAD-MAP 22 Road Show Mersen – November 2022
Slide 23: Key takeaways
KEY TAKEAWAYS Strong growth drivers for the semiconductors industry despite temporary slowdown EV very active in terms of nomination - production will start beginning of 2024 Solar sales very high Still high level of orders Price increase passed on to customer so far Energy costs in Euro
Slide 24: First-Half 2022 Results
First-Half 2022 Results Summary 24 Road Show Mersen – November 2022
Slide 25: Sharp improvement in operating margin before non-recurring items
SHARP IMPROVEMENT IN OPERATING MARGIN BEFORE NON-RECURRING ITEMS THANKS TO VOLUMES AND PRICING H1 2021 operating margin before non- 9.6% In percentage recurring items points 10.5% Volume/mix effect +2.9 9.6% 55 Price effect +2.9 Raw material/energy inflation -2.3 -0.1 43 Productivity gains +1.1 Infl
Slide 26: Operating cash flow impacted by high working capital requirement
OPERATING CASH FLOW IMPACTED BY HIGH WORKING CAPITAL REQUIREMENT In €m H1 2021 H1 2022 Operating cash flow before change in WCR 64.0 82.0 Very favorable cash seasonality Change in WCR (7.3) (70.6) in 2021. Payment in 2022 of very high 2021 bonuses o/w change in inventories (8.6) (55.2) Increase
Slide 27: Solid financial structure
SOLID FINANCIAL STRUCTURE NET DEBT (€m) Net debt/ EBITDA (7) (241) (36) (3) (7) 1.53 (193) 5 Net debt/ equity 34% Using the bank covenant method Not including Lease liabilities: €54m (vs. €53m at Dec. 31, 2021) Provisions for pension obligations: Dec. 31, 2021 Operating cash Capex including flow IT